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Essay / De Beers Case Study - 1246
This essay will begin by examining the founding of De Beers and how it started its marketing campaign and what its effect was on diamond prices. Diamond is commonly known as a material with unique physical qualities. It contains a strong covalent bond between its atoms. Diamond is primarily known for its hardness and durable thermal conductivity compared to bulk materials. These properties make it useful in industrial applications such as cutting and polishing tools. Before the 19th century, diamond minerals were known to be rare because they were found in India and Brazil. In 1870, large diamond deposit mines were discovered in South Africa, near the Orange River. This became a threat to the few diamond producers despite the large supply, making the product a luxury rather than a commodity. Diagram - As we can see in Figure 1.1, the discovery of large mines in South Africa caused an increase in supply, which caused the price of diamond to fall. In 1888, an organization was established, known as De Beers Consolidated Mines in South Africa, by suppliers to ensure a high market for diamond prices. Initially, the diamond cartel successfully controlled global supply and regulated mining production and purchasing the exclusive right to mining countries throughout Africa. At the start of the 20th century, De Beers dominated around 90 percent of the international diamond trade, which proved a monopoly as the diamond industry was largely taken over by a single company. An association was structured because other diamond distributors and miners were concerned that the value of diamonds was declining. Diagram - Figure 1.2 shows an increase in diamond prices because the market supply was limited, therefore the demand for diamonds... middle of paper. ..... strategy carried out by De Beers Corporation to sell to men, it leaves a remarkable mark as a sign of leadership towards the masculine gender according to tradition. The diamond ring means that someone has a commitment to another. Also, the engagement ring implies that the bigger the rock, the bigger the love. This will put pressure on those who buy. The pressure will take the form of financial means, because not everyone has the means. Despite the high price of the diamond, De Beers controls the price as well as the value of a ring. A person's money would be better invested in a house than something that adorns another person in a relationship and later loses value. On the contrary, there have been human rights violations as labor involved in extraction is exploited, particularly in Africa. However, the engagement ring remains an important element during marriage and engagement..